Children in a poor quarter of Kigali, Rwanda. Photograph: Jose Cendon/AFP/Getty Images

Office workers talking over Skype. Fibre-optic cable snaking hundreds of miles underground and to the top of a 4,500-metre volcano. Paperless cabinet meetings with every minister using a laptop. This may sound like an advanced western country rather than a tiny, poor African state. Yet this is Rwanda, now in the midst of an extraordinary development plan to leap into the 21st century.

More "mobile in every pocket" than "chicken in every pot", the Vision 2020 project aims to rapidly transform a depressed agricultural economy into one driven by information communications and technology (ICT). If it works, the percentage of Rwanda's workforce involved in farming will drop from 90% to 50% in 15 years. By then the country should be the regional ICT hub - a kind of Singapore of the Great Lakes.

"Rwanda is to some extent doing with technology what Britain did with mechanisation during the industrial revolution," said Calestous Juma, professor of international development at Harvard University, who believes the plan can serve as an inspiration for Africa.

Donor countries are more cautious. Two-thirds of Rwandans live below the poverty line, half are illiterate and four in five live in rural areas. Aids and the 1994 genocide have created tens of thousands of orphans. Technology is not the main priority, they say.

But government officials insist that not only is their plan viable, but that there is no alternative. As one of Africa's most densely populated countries, large-scale farming is impossible. There are few valuable minerals or oil deposits. The country is landlocked.

"We are at a huge competitive disadvantage to our neighbours," Albert Butare, the minister of communications and energy, told the Guardian. "Our people are the one resource we have, and we must develop them."

Progress has been slower than hoped - only 26% of targets have been met on time so far - but still significant.

When the ICT plan was launched in 2000 only one school in the country had a computer, there was a single internet cafe and a handful of science graduates, and fewer than 100,000 of 8 million people had mobile or fixed-line phones.

Today half of the 2,300 primary schools have at least one computer. There are 30 internet cafes in the leading cities and there will be 30 more in even the most remote rural areas by 2007. Telecoms companies hawk broadband internet for home use. More than 300,000 people have mobiles. If a plan to assemble phones locally, and sell them for the equivalent of £19 with six months to pay, comes to fruition the growth will be even faster.

The Kigali Institute for Science and Technology (Kist), established in 1997 at a former army barracks, has already graduated close to 2,000 students. Still it is just a fraction of the tech-savvy workforce the country needs.

Which is why bringing schools online is seen as crucial. In a two-year, £20m project, the state electricity company will lay fibre-optic cable along its power lines. Cables will be run to schools within three miles of the national grid, giving them high-speed internet access.

Thousands of computers are being ordered for schools from Rwanda Computer Network, which has already assembled and sold more than 6,000 "Gorilla 1000" desktop computers to the government and banks. A software firm has translated a free open-source version of Microsoft Office into Kinyarwanda, the main language.

Meanwhile, the government is offering incentives to attract private investment. The home of the senate, a modern seven-storey building, is being turned into an "ICT park" for hi-tech companies that will receive free rent and utilities.

Five young Rwandan graduates are in charge. Aged 26 to 34, all have studied abroad - in India, South Africa and France - and all have masters degrees in technology-related fields.

"In the long term this whole road could be an 'ICT alley'," said Patrick Nyirishema, 30, an electrical engineer, gesturing towards the wide avenue outside. "People are going to be astonished by what is going to happen here."

The rest of Africa is already taking note. Kigali has also been selected as the headquarters of the 23-country Eastern African Submarine Cable Project, which will greatly increase internet bandwidth in the region. The telecom mast at the top of the Karisimbi volcano will serve as a regional air traffic control centre.

But the biggest challenge is bringing ICT to the poorest rural areas and making it sustainable. A few internet cafes that were set up in small villages failed because people could not afford the dollar-an-hour internet fee.

But in the dusty village of Nyamata, 90 minutes from Kigali, Paul Barera, a 29-year-old Kist graduate, has made his shop work - for him and for his customers. He helps dressmaker Donatille Mukakarara, 38, to use Google to search for new patterns once a week. "The internet has changed my business," she said. "People want modern designs and that's what I can give them."